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Eligibility for free school meals, the early years pupil premium and the free early education entitlement for two-year-olds under Universal Credit Government consultation response February 2018 Contents Introduction 3 Key findings from the consultation and our response 7 Detailed question analysis 13 Free school meals and early years pupil premium 13 The free early education entitlement for two-year-olds 20 Next steps 25 Annex 1 – List of organisations that responded to the consultations 26 2 Introduction Our guiding mission for the Department for Education is to promote social mobility and ensure equality of opportunity for every child. Their background should not determine what they can achieve, and we are committed to supporting children to go as far as their talents will take them. This government has already taken significant steps towards creating an education system that will help achieve this. The next step for us is to ensure that those children and families who are most in need benefit from the full range of support our schools and early years providers can give them. In autumn 2017, we launched public consultations on setting updated criteria for three entitlements which are integral to our ambitions to support children from disadvantaged families. The three entitlements covered by these consultations are as follows: Free school meals We recognise the benefits of providing a healthy school meal to the most disadvantaged children, and we are committed to continuing to provide free school meals1 to families in need. Last year, around 1.1 million of the most disadvantaged children were eligible for and claimed a free meal. As well as providing a nutritious meal for eligible children, free school meals eligibility is also used to determine additional funding for schools, local authorities and early years settings through the pupil premium, the national funding formulae, and the early years pupil premium. The early years pupil premium The early years pupil premium is additional funding for early years settings to improve the education they provide for disadvantaged three and four-year-olds. It gives providers up to £302 a year for each eligible child taking up the universal 15-hour free early education entitlement for three and four year olds. 1 Free school milk is covered by the same legislation as free school meals. Where free school meals is referenced throughout, the same applies to free school milk. 3 The free early education entitlement for two-year-olds High quality early years education and care can have a positive impact on a child’s development, and are particularly important in supporting social mobility for disadvantaged children. The free early education entitlement for two-year-olds offers children from less advantaged backgrounds 15 hours a week, or 570 hours a year, of free early years education. This sits alongside the 15 hours of early years education that all three- and four-year-olds are entitled to, as well as the additional 15 hours for three- and four-year-old children of eligible working parents. Setting new criteria under Universal Credit Since 2013, as a temporary measure, all families receiving Universal Credit have been entitled to the above three entitlements, pending the introduction of new eligibility criteria. The temporary criteria were designed to ensure that families moving on to Universal Credit in the early stages of rollout (for example, those in pilot areas) did not lose these entitlements during that initial period. Since autumn 2017, the national rollout of Universal Credit has accelerated, and as planned, we will now set new criteria for these entitlements. Our proposals to update the eligibility criteria under Universal Credit were published in autumn 2017, with the following aims: • To ensure that our support is targeted effectively towards those families that are most in need of it; • To enable a greater number of children to benefit from these entitlements compared to the previous benefits system; • To ensure that existing claimants are protected against losing these entitlements because of the criteria change; • To ensure that our new arrangements are as clear and straightforward as possible for schools, local authorities, early years providers and parents; and • To be consistent with the wider approach to determining eligibility for other passported benefits that flow from Universal Credit eligibility. This consultation response relates to England only. Northern Ireland, Scotland and Wales have responsibility for establishing their own criteria for these entitlements. This document, alongside our updated Equality Impact Assessments, forms the Government’s response to the two following consultations. 4 Free school meals and the early years pupil premium On 16 November 2017, we published our consultation on how we would determine eligibility for free school meals and the early years pupil premium under Universal Credit. The consultation set out our intention to introduce an annual net earned income threshold of £7,400. A typical family earning around this threshold, depending on their exact circumstances, would have a total annual household income of between £18,000 and £24,000 once benefits are taken into account. Households earning under this threshold, and receiving Universal Credit, would be eligible for free school meals and the early years pupil premium. This is comparable to the approach taken in Scotland, where a net earnings threshold of £610 per month (equating to £7,320 per annum) was introduced in August 2017. Under our proposals, we estimate that by 2022 around 50,000 more children will benefit from a free school meal compared to the previous benefits system.2 We also proposed to introduce transitional protections to ensure that existing recipients of free school meals and the early years pupil premium would not lose their entitlement following the introduction of new eligibility criteria. The free early education entitlement for two-year-olds On 4 December 2017, we published a consultation on eligibility for the free early education entitlement for two-year-olds under Universal Credit. This set out our intention to introduce an annual net earned income threshold of £15,400. A typical family earning around this threshold, depending on their exact circumstances, would have a total annual household income of between £24,000 and £32,000 once benefits are taken into account. Households earning under this threshold, and receiving Universal Credit, would be eligible for the free early education entitlement for two-year- olds. Under this new threshold, we estimate that by 2023 around 7,000 more children will benefit from the two-year-old entitlement compared to the previous benefits system.3 2 The modelling for the threshold was conducted using a range of data, including population projections, Office of Budget Responsibility forecasts of earnings growth and employment rates, and expected levels of take-up. Since we published the consultation, we have updated the modelling with the latest population estimates, earnings data, and assumptions about National Living Wage increases. These numbers will be subject to change as these forecasts are updated. 3 See footnote 1. 5 Children continue to benefit from the free early education entitlement for two-year-olds until they become eligible for the universal three- and four-year-old entitlement, even if their family circumstances change. Therefore, two-year-olds will not lose their entitlement once they have taken it up, and no child who starts their entitlement will lose it because of the introduction of the new earnings threshold. 6 Key findings from the consultation and our response Free school meals and the early years pupil premium Our consultation ran from 16 November 2017 to 11 January 2018. We received 560 responses through our consultation website from a range of individuals and stakeholders, with a breakdown set out in the chart below: Status of respondents Parent/Guardian 208 School 170 Other 88 Local Authority 63 Early Years Provider 20 Not answered 7 Pupil/Student 3 FE Provider 1 0 50 100 150 200 250 In addition, we received 8,421 emails as part of the Children’s Society “Fair and Square” campaign, which asked people to share the Children’s Society’s response to our consultation. This campaign proposed that all children in families receiving Universal Credit should be eligible for free school meals in future. We also received a further 16 freeform responses which did not directly answer the questions posed in the consultation. These responses have not been included in the data analysis used in this document but have been considered when formulating our response. Departmental officials also met a range of interested organisations during the consultation to understand their views in more detail. Summary of responses The majority of those who replied through our consultation website (56% of 560) agreed with our proposed net earnings threshold of £7,400 per annum. They cited it as an improvement on the current system of eligibility, as it would mean that eligibility was based on a household’s earnings, rather than the number of hours worked. There was 7 also support for our proposal to set the threshold at a level that we estimated would increase the number of eligible pupils. However, a significant proportion of respondents believed that free school meals should be extended to all households on Universal Credit, as this would reach a greater number of children and raise the level of earnings at which families would cease to be eligible. Many respondents also believed that our proposals might discourage some families from raising their earnings above the proposed threshold. The vast majority of respondents (87% of 560) agreed with our proposals to protect families against losing their free school meals during the transition to the new criteria under Universal Credit. Many recognised that this would give certainty to families and ensure that children did not experience a sudden loss of their free school meals during the transition to Universal Credit.

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